Business Directories

Bahrain Air on the verge of bankruptcy

Manama, February 5, 2014

Hundreds of Bahrain Air staff who lost their jobs when the airline went into voluntary liquidation are unlikely to receive severance packages with the company allegedly about to file for bankruptcy.

Millions of dinars owned to companies will also have to be written off as the carrier changes its legal status, said a report in the Gulf Daily News (GDN), our sister publication.

The revelations come almost a year after the airline went into voluntary liquidation, with the loss of 345 jobs.

Numerous lawsuits were earlier filed against the carrier by disgruntled employees and it is understood it owes companies at least BD4 million ($10.5 million).

A lawyer arguing on behalf of former Bahrain Air staff told the GDN the courts had already informed people with cases against the airline that it will file for bankruptcy within weeks.

"The airline is filing for bankruptcy on February 19 which means that all the 75 individuals (who have cases pending) and any companies with cases against it will get nothing," he said.

"Because they are filing for bankruptcy in February then all those cases in which verdicts were due in March will be useless.

"By filing for bankruptcy they don't have to pay anyone anything and instead the burden of distributing the assets will be on the court and that includes the millions they owe to companies too."

One former Bahrain Air employee, who is among those taking legal action against the airline, said many of those who lost their jobs were still struggling to make ends meet.

"The airline is filing for bankruptcy and we are all worried that we will get nothing once that happens," he said.

"Many people got 40 per cent of their severance packages but since I was among the 33 people who refused that deal and asked for the entire package, I was denied that right.

"So I thought if I withdrew from the case then I could at least get my 40 per cent but it's too late now - so I am locked into the case and I know I won't get anything.

"Our case is due for final verdict in March and they will file (for bankruptcy) in February, so even if we win they will not have any money to pay us."

The airline previously agreed severance packages of 24 days' pay for each year its employee had worked, in addition to compensation for their notice period and leave, as well as indemnity for expats.

However, former staff had their bank accounts and credit cards frozen after the airline announced it was going into liquidation, based on fears that they might leave the country with unpaid debts.

At least 22,000 tickets bought by passengers were also rendered worthless when the airline cancelled its operations and they too have demanded compensation. No one from the Bahrain Air Trade Union could be reached for comment. - TradeArabia News Service